Appraisal season is always interesting. Whether you're the appraiser or the appraisee, everyone seems to dread them. Why?
As Pfeffer and Sutton point out1, the problem is that, just as with driving, we all believe we're above average performers in the workplace. The appraisal is when our comforting self-delusion comes up against the brick wall of objective fact or, more controversially, a manager's judgement.
Joel Spolsky argues powerfully that appraisals or performance reviews can only do harm in terms of staff morale and motivation:
"Most people think that they do pretty good work (even if they don't).
It's just a little trick our minds play on us to keep life bearable. So
if everybody thinks they do good work, and the reviews are merely correct (which is not very easy to achieve), then most people will be disappointed by their reviews. The cost of this in morale is hard to understate."
Frankly, it's hard to disagree with this assessment. Perhaps it's time to ditch performance reviews—what do you think?
Joel also slams incentive pay, seeing it as patronising and ineffective. This is probably more controversial, but also has some evidence to support it. Pfeffer and Sutton argue that individual incentives only work when performance can be objectively assessed and when results can be linked very directly to individual effort. Neither of those criteria is often met in practice.
If you haven't seen it, I recommend that you get hold of Stakeholder Satisfaction magazine, the most recent issue came out a couple of weeks ago. It deals with all aspects of customer & employee satisfaction. It has some great case studies as well.
If you are in the UK and qualify, you can sign up for a free print copy here.
Alternatively, read the articles online (including back issues) here.
I went to a friend's emigration party last week. Emigrating isn't that unusual, but what was unusual was the amount of time that he been with his employer in the UK - 23 years. He's been with the same company from joining them as a 16 year old apprentice working his way through to senior management and then finally leaving them for pastures new at the age of 39.
What struck me is just how rare this longevity is now. Of course, most people don't expect their employment with one organisation to last anything like this length of time, but that isn't the only factor. A quick strawpoll amongst other people at the party confirmed what I thought - in general terms, people get dissatisfied with their current employer / position / reward / prospects and move on. This begs the question, was my friend fortunate enough to work in an organisation that tries hard to satisfy its employees, or was he (as some would argue) not ambitious enough?
How long do people normally stay with your organisation? Why?
In our conference presentation, Greg and I discussed the role emotions play in customers' decisions. One interesting titbit from the psychological literature, that I didn't have time for on the day, is that emotions are known to be very contagious.
In other words we tend to feel sad when there we're talking to someone sad, and to feel happy when we're talking to someone happy. This has obvious implications for the "employee-customer satisfaction mirror"—satisfied employees help to make customers more satisfied and vice versa.
We also know that people are very adept at telling false smiles from real smiles (we have a whole region of the brain specialised for processing information about faces). The answer is not to plaster a fake grin and a "have a nice day" onto your customer service; but to recruit nice people, then motivate and empower them. Easy enough, you would think!
The BBC News website carried a fascinating article yesterday "Staff appraisals 'waste of time'". Apparently appraisals are viewed rather dimly by many UK workers. 29% of people said their appraisal was a complete waste of time and 44% believed their appraiser had been dishonest.
The article goes on, but the bottom line is that appraisals don't have a great reputation for many workers.
So what's this got to do with Customer Satisfaction? Well, quite a lot actually.
Concepts like the Value Profit Chain show that employee and customer satisfaction are inextricably linked. Now of course, employee satisfaction doesn't just revolve around appraisals, but they do form part of the mix that determines overall employee satisfaction.
The work of Harvard has labelled this "the customer-employee satisfaction mirror". They've demonstrated that employee satisfaction produces higher levels of customer satisfaction. Plus, it's been shown that higher customer satisfaction produces higher employee satisfaction (wouldn't you want to work in a place where the customers are happy and don't keep having a go at staff!). More satisfied employees stay longer, by doing this they retain expertise and customer relationships within the organisation.
So, satisfied employees help to make highly satisfied customers which is good for profits.
If you're working on boosting your customers' satisfaction remember to consider your employees' satisfaction levels as well. This course might give you some ideas.
Enterprise is widening the gap from its competitors in satisfaction Nov 2007
Back in October 2004, Stakeholder Satisfaction featured an article on how customer satisfaction was treated at Enterprise Rent-a-Car. The article was entitled "What gets measured gets done" and it explained Enterprise's internal measure of satisfaction "ESQi" or "Enterprise Service Quality Index".
For the fourth year in a row, Enterprise Rent-A-Car was the highest-rated car brand in the study.
A key point in Enterprise's success has been using the right measures to effectively manage employee's behaviour and organisational performance. Hill et al even cite Enterprise as a prime example of why you should measure satisfaction (see page 35 of Customer Satisfaction).
One of the questions we're often asked is how to get ideas for improving satisfaction. There are many answers [PDF], but one of the easiest (and best) ways is to ask employees for ideas.
Whether it's improving customer satisfaction, employee satisfaction, or process efficiency, employees have a wealth of knowledge and ideas that you could benefit from tapping. This is an area where new technology can really offer something, turning a corporate intranet into a vibrant discussion forum instead of a tightly-controlled propaganda pamphlet. If you trust your employees and value their input.